CICC: Current Gold Price May Have Excessive Fed Rate Hike Expectations

BlockBeats News, July 1st, the latest research report from CICC pointed out that the current gold price may have already priced in the rate hike expectations. A Fed rate hike is still not the base case scenario, and the gold market may have overly incorporated the rate hike expectations, leaving room for retracement later this year. CICC's macro team believes that the increasing pressure from employment and consumption and the expanding financing demand from the U.S. AI economy may make it difficult for the Fed to substantially turn hawkish, and the monetary policy could be more of a "naming hawk, acting dove" approach. Based on the implied interest rate expectations from the gold price, the current price of around $4000 per ounce has already fully priced in 3-4 rate hikes, which is higher than the rate futures market's expectations. Looking ahead, after further reflection of the oil price drop in the U.S. short-term inflation data, the gold market's pricing of rate hike expectations may be corrected, providing an opportunity for short-term funds to reposition in the futures market. (FX678)